As more TV viewers are waving good bye to their cable companies and turning to the internet for their entertainment, it is not surprising that You Tube is bending over backwards to welcome Hollywood to its popular URL at: www.youtube.com

This past week Google announced that it had reached agreements with several notable media companies to offer its more than 100 million monthly visitors access to full length TV shows and featured films. This is only the “first step” to what appears a strategy to attain access to the largest high definitions video library on the planet.

Social Media sites represent 10 of the top 20 destinations on the web. They are where 82% of internet users watch video clips, 72% read blogs, 63% visit photo sharing sites, and 57% have social network profiles. People go to these sites to consume media, learn about products, and share their opinions. Yet regardless that two-thirds of all video views in the U.S. occur on You Tube, like the other social media sites including; FaceBook, MySpace and Twitter, it struggles to generate revenue from its popularity. You Tube is expected to lose 470 million this year according to analyst Spenser Wang at Credit Suisse who views increasing the monetization of streams as the key for You Tube.

So, business deals with Disney and Sony are important to You Tube because they open the door to revenue models to place ads and share in profits with partners. This is important when you consider the fact that the social media world is fickle and Hulu has a competitive edge in terms of full-length video content on the internet. Owned by NBC Universal and Rupert Murdoch’s News Corp, Hulu is ad supported and offers far more first run TV shows, such as “30 Rock”, “24”, and “The Simpsons” than You Tube has had access to.

Currently none of the companies involved in the deals with You Tube are disclosing much. Sony purchased Crackle in 2006 and makes available some 60 movie titles already. This site was originally a video sharing site like You Tube but Sony changed their business model to full-length videos when they realized that You Tube dominated that market. The advantage of a deal with You Tube is access to a larger market. While revenues on the internet do not match those from the cable companies Sony realizes that making its inventory available on the web is an important channel and growing opportunity. It will be up to You Tube to show the studios how they can make web revenue so that down the road You Tube may have a shot at providing more of that extensive, valuable Hollywood content.

You Tube could well become the cable channel of the future. Imagine your son uploading his latest skateboarding video to You Tube for his Facebook friends to view and being sent a trailer of Skateboarder Seth Green from “Airborne” with the option of paying and scheduling an online movie night? Old Dutch, Coke, gee…there could be lots of sponsors for You Tube virtual movie nights and perhaps even an opportunity to throw Twinkies during the show.